Why Wall Street is suddenly bullish on work-life balance

In December, Bloomberg News set forth analysing Wall Street’s “existential angst,” at the culmination of a year in which the financial industry might instead have felt self-congratulatory. A robust market and resurgence of deal-making led major banks to near-record profits; bonuses were expected to soar.

In this second pandemic year, bonuses would reach the highest point “since the Great Recession,” the business press repeatedly exulted, overlooking the incongruities of a system that so reliably converted the hardships of the many into gains for the very few.

Wall Street has been hit by the Great Resignation.

Wall Street has been hit by the Great Resignation.Credit:Bloomberg

Bonus season, having arrived, has lived up to expectations, with big investment banks increasing compensation packages by roughly 20 per cent to 50 per cent of last year’s payout. The “angst” was born in part of envy, as cryptocurrency was turning 10th graders into multimillionaires free of the burdens of online team meetings and participation in never-ending initiatives to transform corporate culture.

“Culture” was the other part of the equation, a persistent problem heightened by the isolation of the pandemic. Wall Street is accustomed to internal attacks over the relentless demands it famously makes of the young. This kind of self-reflection is cyclical: corrections follow tragedy. In 2013 the sudden death of a 21-year-old banking intern in London, who was regularly working through the night, prompted some very vocal change. But the old patterns reestablish themselves soon enough.

COVID brought renewed concerns. In March, a leaked PowerPoint presentation assembled by 13 junior bankers at Goldman Sachs made its way around social media, reverberating throughout the financial world with complaints of 110-hour work weeks that amounted to “abuse.” As one analyst quoted in the presentation put it, “I’ve been through foster care, and this is arguably worse.”


The industry responded with higher base salaries for those young bankers traditionally worn to the bone, spot bonuses, Peloton bikes. But would this really quiet the agony at a moment when work habits were undergoing reevaluation across professions and social class, when we were in the midst, we were told, of the Great Resignation?

Research published last month in the Massachusetts Institute of Technology’s Sloan Management Review offers some insight. The salient point it makes is that a “toxic work culture” was more than 10 times as predictive of attrition than insufficient compensation. The analysis began with an examination of 34 million online profiles, culled by Revelio Labs (one of the authors, Ben Zweig, is CEO) to identify workers who left their jobs between April and September last year. From there, researchers estimated attrition rates, at the individual corporate level, for 500 organisations employing about a quarter of the private-sector workforce.

Attrition rates in the financial sector hovered around 9 per cent and 10 per cent, several points higher than those for the health care and telecommunications industries and nearly twice as high as the figure for the airlines. Management consulting, with its own outsize commitments to round-the-clock scheduling, averaged one of the highest attrition rates: 16 per cent.

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